{"id":5707,"date":"2023-09-26T12:52:24","date_gmt":"2023-09-26T11:52:24","guid":{"rendered":"https:\/\/geneve-avocat.net\/tax-on-distribution-of-profits\/"},"modified":"2025-05-13T12:38:06","modified_gmt":"2025-05-13T11:38:06","slug":"tax-distribution-profits","status":"publish","type":"page","link":"https:\/\/geneve-avocat.net\/en\/tax-distribution-profits\/","title":{"rendered":"Tax on distribution of profits"},"content":{"rendered":"\t\t
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Tax on distribution of profits<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Tax on profit distribution<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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In Switzerland, the withholding tax is a form of federal tax designed to tax income generated by profit distributions.
\nRegulated by the Federal Withholding Tax Act (LIA), it applies to Swiss and foreign companies with a branch in Switzerland that pay dividends to their shareholders.
\nIn this first chapter, we examine the characteristics of this tax and its importance for the Swiss economy. <\/p>\n

Who is affected by the dividend tax?<\/h2>\n

All Swiss companies are subject to tax on the distribution of profits, but the tax rate varies according to the type of company.
\nLimited liability companies (S\u00e0rl), public limited companies (SA), limited partnerships (SNC) and partnerships limited by shares (SCA) are all concerned.
\nHowever, SNCs are not subject to this tax, as they are not considered as separate tax entities.
\nProfits made by SNCs are taxed directly on the beneficiaries of the profits. <\/p>\n

How is dividend tax calculated?<\/h2>\n

Dividend tax is calculated on the basis of a company’s distributable profit.
\nThis is determined by deducting deductible expenses from the company’s sales.
\nThe distributable profit is then subject to corporate income tax at the applicable rate.
\nOnce the income tax has been calculated, the company must determine the amount of dividends to be paid to shareholders.
\nIt must then withhold income tax at the applicable rate before paying the dividends.
\nThe rate of dividend tax varies according to the situation of the company and the shareholder.
\nForeign shareholders are also subject to dividend tax, but the rate may be reduced under a double taxation agreement between Switzerland and their country of residence.
\nIn addition, dividends received by companies are not subject to tax on the distribution of profits.
\nCompanies can deduct dividends received from their taxable profits, thereby reducing their tax burden. <\/p>\n

Advantageous tax regimes for Swiss companies<\/h2>\n

Swiss companies can benefit from advantageous tax regimes to reduce their tax burden on dividends.
\nAmong the most common tax regimes are the holding company tax regime and the participation deduction. <\/p>\n

The holding company tax regime enables Swiss companies to hold stakes in foreign companies and benefit from a favorable tax rate on dividends received.
\nIn addition, holding companies can deduct certain expenses from their taxable income, further reducing their tax burden. <\/p>\n

The participation deduction is another advantageous tax regime for Swiss companies that hold a significant stake in another company.
\nThis scheme enables companies to reduce their tax burden on dividends received according to the percentage of shareholding held.
\nTo benefit from the participation reduction, the company must hold at least 10% of the share capital of the issuing company for at least one year.
\nThis measure was introduced to encourage long-term investment and facilitate mergers and acquisitions.
\nIt enables companies to reduce their tax burden on dividends received, thereby increasing their investment capacity. <\/p>\n

However, these advantageous tax schemes are subject to certain limits and conditions, and must be applied for by companies in order to benefit from them.
\nIn fact, the participation deduction is not automatic and must be applied for by the company in order to benefit from this tax advantage. <\/p>\n

A federal tax applied to companies<\/h2>\n

In conclusion, the profit distribution tax in Switzerland is a federal tax applied to companies that distribute dividends to their shareholders.
\nBoth Swiss companies and foreign companies with branches in Switzerland are subject to this tax, which is designed to tax income generated by profit distributions.
\nCompanies can benefit from advantageous tax regimes, such as the holding company tax regime and the participation deduction, to reduce their tax burden on dividends.
\nHowever, these schemes are subject to certain limits and conditions, and must be applied for by companies in order to benefit from them.
\nAs a pillar of the Swiss economy, the tax on profit distribution plays a crucial role in maintaining tax fairness and financing public infrastructure. <\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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An initial consultation <\/p>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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from 60 min to CHF 220.00<\/p>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Take stock of your situation with a specialist lawyer.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Would you just like to make an appointment to ask a few questions?
<\/i>Not sure what to do?
Is your situation unclear?<\/p>\n

Opt for an initial consultation with a lawyer.<\/strong><\/p>\n

You will then decide whether you wish to proceed, and our lawyers will give you the cost of the procedure according to your case.
\nAppointments can be made in person or by videoconference. <\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Tax on distribution of profits Make an appointment with a lawyer Tax on profit distribution In Switzerland, the withholding tax is a form of federal tax designed to tax income generated by profit distributions. Regulated by the Federal Withholding Tax Act (LIA), it applies to Swiss and foreign companies with a branch in Switzerland that … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"elementor_header_footer","meta":{"_acf_changed":false,"_seopress_robots_primary_cat":"","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"class_list":["post-5707","page","type-page","status-publish"],"acf":[],"_links":{"self":[{"href":"https:\/\/geneve-avocat.net\/en\/wp-json\/wp\/v2\/pages\/5707","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/geneve-avocat.net\/en\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/geneve-avocat.net\/en\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/geneve-avocat.net\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/geneve-avocat.net\/en\/wp-json\/wp\/v2\/comments?post=5707"}],"version-history":[{"count":8,"href":"https:\/\/geneve-avocat.net\/en\/wp-json\/wp\/v2\/pages\/5707\/revisions"}],"predecessor-version":[{"id":7423,"href":"https:\/\/geneve-avocat.net\/en\/wp-json\/wp\/v2\/pages\/5707\/revisions\/7423"}],"wp:attachment":[{"href":"https:\/\/geneve-avocat.net\/en\/wp-json\/wp\/v2\/media?parent=5707"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}